New options emerge for those with troubled mortgages
| Monday, May 09 2011 10:48 AM
Last Updated Monday, May 09 2011 10:50 AM
Loan servicers may participate in some, none or all of the following programs. Go to http://www.keepyourhomecalifornia .org/participating.htm to view which loan servicers are participating in which programs.
Unemployment Mortgage Assistance Program -- Provides a mortgage payment subsidy for up to six months, with a monthly benefit of up to $3,000 or 100 percent of the existing total monthly mortgage, whichever is less, for people out of work.
Mortgage Reinstatement Assistance Program -- Limited financial assistance to help current homeowners who are behind on payments due to a temporary change in household circumstances. Benefits of up to $15,000 per household.
Principal Reduction Program -- Assists homeowners at risk of default because of economic hardship coupled with a severe decline in the home's value. Funds help pay down principal balances of qualified borrowers with negative equity, most likely as a prelude to loan modification. Servicers who contribute through matching funds increase the benefit for homeowners.
Transition Assistance Program -- Provides relocation assistance when it is determined that homeowners can no longer afford their home. Used in conjunction with a servicer-approved short sale or deed-in-lieu of foreclosure program to help homeowners transition into stable and affordable housing. Homeowners will be responsible for maintaining the property until the home is sold or returned to the servicer as negotiated.
For more information on any of the programs, call 888-954-5337 or visit keepyourhomecalifornia.org.
Source: California Housing Finance Agency
Wells Fargo & Co. is hosting a free workshop for Wells Fargo Home Mortgage, Wells Fargo Financial, Wachovia Mortgage and Wells Fargo Home Equity customers facing financial hardships. The one-day workshop for Central Valley homeowners is 9 a.m. to 7 p.m. May 17 in the Grand Ballroom of the Marriott Hotel, 801 Truxtun Ave., in Bakersfield.
Bank of America will more than triple the number of customer assistance centers it operates for troubled borrowers in coming weeks. The expansion will include a new Bakersfield location set to open some time before the end of June. Hours and location will be announced soon.
Local mortgage borrowers who are at risk of losing their homes have several new options for getting help.
Wells Fargo will hold a free all-day counseling workshop for borrowers it services on May 17 at the Marriott Hotel, and Bank of America plans to open a permanent customer service center where its borrowers can meet with officials in person before the end of June.
Banks are stepping up their outreach efforts since the launch of Keep Your Home California. Administered by the California Housing Finance Agency, that's a package of programs for low- and moderate-income borrowers who are struggling to stave off foreclosure.
It's funded by $2 billion in federal money originally set aside for bank bailouts, but participating banks are contributing matching funds for some components.
The money funds four separate programs that help with mortgage payments, principal loan reduction or relocation expenses. It's a voluntary campaign, so banks and servicers may participate in all four programs, choose only one or a few of them or opt out entirely.
Since the launch of Keep Your Home California a couple of months ago, 2,000 homeowners are "well on the way to some form of help," said the program's assistant director of marketing, Evan Gerberding.
"We're averaging 500 calls a day so we're pretty happy with that," she said.
The state is a little less enthusiastic about the participation of banks. Only 15 have committed to work with Keep Your Home California to date.
"We're talking to servicers literally every day to get more of them involved, and to get the servicers who are on board to increase the number of programs they're participating in," Gerberding said.
"I think it's just a matter of time before we have quite a few that are offering all four programs."
Bank of America has signed on for the principal reduction program and another one that temporarily makes mortgage payments for people out of work. The bank was especially glad to see the state offer unemployment help because that was a major gap in federal programming, said spokesman Rick Simon.
"You can't do a HAMP modification or any other modification for someone who has no income," he said.
HAMP is the acronym for the federal Home Affordable Modification Program, which lowers a borrower's monthly mortgage payment to 31 percent of the homeowner's gross monthly income.
Through last April 29, the state had referred 162 applicants to Bank of America, and a total of $115,000 in mortgage assistance had been paid by the state. With early May mortgage payments, the cumulative total of assistance paid on behalf of homeowners rose to $318,000, Simon said.
Wells Fargo is participating in the state's unemployment assistance program, too, as well as one that helps bring current homeowners who are behind on payments.
It has not enrolled in the principal reduction program because it was already considering reductions on a case-by-case basis on its own, said spokeswoman Julie Green-Rommel.
Since 2009, Wells Fargo has written down $3.9 billion in principal for about 73,000 customers facing hardships nationwide, an average of 16 percent of the principal owed on each loan, Green-Rommel said.
